Compare the interest earned by $10,000 for three years at 7% simple interest with interest earned by the same amount for three years at 7% compounded annually. Why does a difference occur?Click the icon to view the interest and annuity table for discrete compounding when i = 7% per year.The simple interest earned is $The compound interest earned is $(Round to the nearest dollar.)(Round to the nearest dollar.)There is a difference in the amount of interest earned becauseoriginal principal.allows interest from previous years to earn additional interest, whereasonly considers the

Simple interest is a method of calculating interest where the interest amount is calculated solely…

Compare the interest earned by $10,000 for three years at 7% simple interest with interest earned by the same amount for three years at 7% compounded annually. Why does a difference occur? Click the icon to view the interest and annuity table for discrete compounding when i = 7% per year. C

Compare the interest earned by $10,000 for three years at 7% simple interest with interest earned by the same amount for three years at 7% compounded annually. Why does a difference occur? Click the icon to view the interest and annuity table for discrete compounding when i = 7% per year. C

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Compare the interest earned by $10,000 for three years at 7% simple interest with interest earned by the same amount for three years at 7% compounded annually. Why does a difference occur?
Click the icon to view the interest and annuity table for discrete compounding when i = 7% per year.
The simple interest earned is $
The compound interest earned is $
(Round to the nearest dollar.)
(Round to the nearest dollar.)
There is a difference in the amount of interest earned because
original principal.
allows interest from previous years to earn additional interest, whereas
only considers the

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